Economics Questions

Re: economics of phone chargers and standardization

DD5 — Fri, 10 Jul 2009 21:52:42 GMT

10Brandonr:

But I still can't imagine any negative effects or the costs of voluntary standardization of phone chargers, at least within a singular firm itself.

Can you imagine entrepreneurs not striving after higher profits (or avoiding losses)? If no, then you should stop loosing sleep at night over the imaginary inefficiencies of the market and start to worry more about the fascist EU (and USA) expanding. I stand by my above (initial) response to your question. The real answer lies in understanding the difference between need and demand.

To further elaborate:

There are transitory costs of not only production but also engineering. Then there are long term costs of having an unnecessary constraint in your design.

How will this constraint (forced to use a particular charger) affect future engineering and decisions regarding product enhancements?

What new engineering solutions and innovations will be scrapped away because of such a technological constraint?

What production innovations will be scrapped away because of such a constraint?

The only way to efficiently balance between the different tradeoffs is to have the market respond to consumers, as oppose to the arbitrary whim of the government.

What is certain is that there will be short term and long term consequences. This regulation will affect the natural evolutionary process of the cell phone. It will evolve not entirely according to how consumers would have dictated.

Besides, what is the moral implication of a mandatory charger? That is if I design and build a cell phone with a different charger and you are willing to buy it, I am now a criminal?

Re: economics of phone chargers and standardization

10Brandonr — Fri, 10 Jul 2009 20:16:52 GMT

With every new cell phone, the producer also includes a new charger, because every new phone, although still charging with the same method, uses a different sized hookup. WHen a new phone comes out, the old charger becomes useless and must be thrown out, this represents unnecessary waste and an increased cost for firms, as well as an inconvenience for consumers. In a free market firms attempt to lower cost by increasing efficiencies. I'm not a cell phone producer, but would it not be more efficient to make all cell phones use the same size plug in, thus the same charger?... I guess I'm not sure if any of us are qualified to answer my question, since we are not cell phone producers, and simply don't understand the costs and profits associated with cell phone chargers. But I still can't imagine any negative effects or the costs of voluntary standardization of phone chargers, at least within a singular firm itself.

Re: economics of phone chargers and standardization

DD5 — Fri, 10 Jul 2009 18:26:04 GMT

10Brandonr:

Is there an economic explanation as to why cell phone producers have not yet chosen to standardize phone chargers? It appears that legislation in the EU will demand a standardization of phone chargers; So I'm wondering exactly why the free market has chosen not to standardize phone chargers, despite high consumer demand, and the apparent wastefulness of producing new phone chargers for each new phone? Any theories?

It's the fallacious equality of need and demand that the government is so good at propagating. Markets react to consumer demand, where as Santa Clause reacts to "need". Since Government is no Santa Clause, it will simply initiate "demand" for you at the expense of something else that was more urgent for you. Since the consumer is as ignorant on the matter as your pet, he is simply cheering on his own impoverishment.

It's true as pointed out here that there is no pure free market, however, no one can say whether that is making the difference for this particular feature.

The market reacts to demand. Perhaps there is a need for a standardized charger, but is there a demand? In other words, are consumers willing to pay for it? What are the implications of standardization on costs of production and what are the tradeoffs that consumers will be making? This is clearly a typical example illustrating the impossibility of socialism, which is what this regulation amounts to.

It is inconceivable that this is a feature that consumers are demanding, but entrepreneurs seeking profit are simply blinded by such opportunities. Even after it is being discussed so much by the government

Re: economics of phone chargers and standardization

Jon Irenicus — Fri, 10 Jul 2009 17:30:31 GMT

Not really though... even so it still produces unnecessary waste and increased production costs for firms, and the economy as a whole.

Then please go into the market and make a killing, unlike the EU parasites.

Re: economics of phone chargers and standardization

Nielsio — Fri, 10 Jul 2009 15:34:15 GMT

http://www.inference.phy.cam.ac.uk/sustainable/charger/

Re: economics of phone chargers and standardization

DanielMuff — Fri, 10 Jul 2009 15:18:34 GMT

10Brandonr:

Daniel:

It's because the free market is not at work.

how so?

If there weren't so many government-imposed barriers to entry, then perhaps a firm could enter the mobile phone industry and provide a universal charger for all it's mobile phones.

Re: economics of phone chargers and standardization

fezwhatley — Fri, 10 Jul 2009 09:36:39 GMT

10Brandonr:
So I'm wondering exactly why the free market has chosen not to standardize phone chargers, despite high consumer demand, and the apparent wastefulness of producing new phone chargers for each new phone?

i don't think phone chargers are wasteful, they serve a real purpose. Do you really believe that the fact, phone charges and the means to recharging cell phone batteries are not universal- therefore the market is wasteful? That sounds ridiculous.

Hey, you know what else seems wasteful? Parking lots, dishwashing, paper menus, at eating establishments. Maybe all restaurants should adopt the fast-food model, and serve all their food from a drive thru window, recycleable utensils, and public menus, Think of all the resources we could save from not building 8,000 sq. foot parking lots.

Re: economics of phone chargers and standardization

Ivan Ivanov — Fri, 10 Jul 2009 08:56:58 GMT

I'd say it's because there are different ways of doing this, different technologies, neither has any clear advantage over all the others, and the cost of diversity in chargers is actually next to nothing.

And what do you mean there is high consumer demand for this? How does it manifest itself? There are phones that can be charged via USB, this is as standard and universal as it gets, yet I don't see people abandoning other features for a universal charging port. I would therefore conclude that the demand for other features is actually greater then the demand for a universal charger.

Re: economics of phone chargers and standardization

10Brandonr — Fri, 10 Jul 2009 08:17:30 GMT

Dopey Gigglz:

You can buy universal phone chargers for a few dollars.

Not really though... even so it still produces unnecessary waste and increased production costs for firms, and the economy as a whole.

Re: economics of phone chargers and standardization

10Brandonr — Fri, 10 Jul 2009 08:14:02 GMT

Daniel:

It's because the free market is not at work.

how so?

Re: economics of phone chargers and standardization

DanielMuff — Fri, 10 Jul 2009 08:00:46 GMT

It's because the free market is not at work.

Re: economics of phone chargers and standardization

Dopey Gigglz — Fri, 10 Jul 2009 07:59:43 GMT

You can buy universal phone chargers for a few dollars.

economics of phone chargers and standardization

10Brandonr — Fri, 10 Jul 2009 07:55:33 GMT

Is there an economic explanation as to why cell phone producers have not yet chosen to standardize phone chargers? It appears that legislation in the EU will demand a standardization of phone chargers; So I'm wondering exactly why the free market has chosen not to standardize phone chargers, despite high consumer demand, and the apparent wastefulness of producing new phone chargers for each new phone? Any theories?